Forget Texas, Forget Florida, forget Arizona, Forget California….Detroit may be one of the least expensive places to retire.
There may be a way for metro Detroiter’s to provide a good retirement home for themselves very reasonably. If you are 50 – 60 years old it may not too late to provide for your retirement. Here’s my thoughts.
If you by a very reasonable house right now in one of Metro Detroit’s suburbs and ride out the Metro Detroit real estate market you should be able to do a reverse mortgage in the future. This is my example. Let’s say you snap up a great deal that you can put some sweat equity in. Let’s say you buy a 1100 square foot home for $30,000 in one of Metro Detroit’s suburbs. Then you ride out this buyer’s market and your home appreciates in value. Let’s just say it only doubles in value in the next 10 -15 years. The home then would be worth $60,000.
If reverse mortgage loans keep the same rules you would be able to get your $30,000 back and be able to live in the home the rest of your life. So let’s look at this. Let’s say your taxes were $250 a month on the home and you borrowed to buy this $30,000 home. Let’s say you did a FHA loan.
So here is how I figure it
Principal & interest payment $161
Total monthly cost to live $471 a month to live ……. that is cheaper than renting
In ten years you will have paid off about $5000. But this the great part of the plan. You could get a small lump sum up front in ten years from a reverse mortgage and pay off the FHA mortgage. So for a small investment right now you could live in a Metro Detroit home the rest of your life. For less than what it would cost you to rent. You could live off your social security.
Can you imagine being able to live in a house that you only have invested $1000 in (plus closing costs) Then being able to live for the rest of your life and just pay taxes on it?
If you are 50 or 55 or 60 and paying $700 or $800 a month in rent give me a call. Buying smart in this market may pay big dividends for you in the future. Even if you never have owned a home it may make sense. If you have been wondering how you are going to live in the years to come call me and we may be able to help you. Now is a great time to buy a metro Detroit home if you plan right.
Russ Ravary your Metro Detroit Real estate agent
** I don’t guarantee that reverse mortgages will be around in the future, or that reverse mortgage rules will stay the same, or that the house you buy now will increase in value.